Financial Performance - Net profits income for 2024 was 12,300,176 in 2023, primarily due to decreased oil and gas production and lower prices[132]. - Total income for 2024 was 12,364,073 in 2023, reflecting a decline of 46.6%[182]. - Distributable income for 2024 was 11,547,888 in 2023, representing a decrease of 50.8%[182]. - Distributable income per unit for 2024 was 1.924648 in 2023, a decline of 50.8%[182]. - Fourth quarter 2024 net profits income totaled 2,548,233 in the fourth quarter of 2023[143]. - Distributable income for the fourth quarter of 2024 was 0.219599 per unit, compared to 0.402814 per unit in the fourth quarter of 2023[144]. Production and Reserves - Approximately 46% of the net profits income received by the Trust during 2024 was attributable to natural gas, with 40% of the Trust's estimated future net cash flows from proved reserves at December 31, 2024[30]. - Estimated proved reserves for the net profits interests are based on estimates of reserves for the underlying properties and can be significantly affected by fluctuations in oil and gas prices[41]. - The Trust's total proved reserves as of December 31, 2024, consist of 1,301,000 Bbls of oil and 8,334,000 Mcf of gas[87]. - The Trust's net profits are derived from the sale of hydrocarbons from depleting assets, and if no successful development projects are performed, the assets may deplete faster than expected[46]. - The underlying properties include over 2,900 producing properties with an average reserve-to-production index of approximately 11 years as of December 31, 2024[72]. Costs and Expenses - Total costs deducted in the calculation of net profits income were 11.5 million in 2023[141]. - Average production cost per BOE for oil is 1.67 in 2023 and an increase of 25.3% from 54.04 in 2024, an increase of 1.8% from 27.71 in 2022[92]. - Total underlying development costs for 2024 were 1,061,887[84]. Market and Pricing - The Trust's monthly cash distributions are highly dependent on the prices realized from the sale of natural gas and oil, which can fluctuate widely due to various uncontrollable factors[36]. - Average sales price for oil in 2024 is 79.50 in 2023 and a decrease of 3.4% from 3.92 per Mcf, a significant decrease of 34.1% from 7.95 in 2022[92]. Risks and Liabilities - The Trust's financial performance is subject to various risk factors, including geopolitical instability and market volatility, which could materially affect its distributable income[32]. - The Trust's distributions may be adversely affected by operational risks and hazards associated with the production and transportation of oil and natural gas[42]. - Government actions or regulations aimed at reducing oil and natural gas production could impact the price of these commodities and, consequently, the Trust's net profits[38]. - Cybersecurity threats pose risks that could materially affect the Trust's business, financial condition, and results of operations[68]. - The Trust unitholders may be exposed to personal liability due to the structure of the Trust not providing the same limited liability protections as a corporation[55]. Trust Structure and Governance - Trust unitholders have limited voting rights and cannot influence the operations or future development of the underlying properties[52]. - The Trust's financial statements are prepared on a modified cash basis of accounting, differing from U.S. GAAP[54]. - The Trust expects to continue being exempt from Texas franchise tax as a passive entity[200]. - The Trust's only cash requirement is the declared monthly distribution of income to unitholders, funded by net profits income after administration expenses[149]. Future Outlook - Future net cash flows from proved reserves are approximately 38% natural gas and 62% oil, with total future net cash flows estimated at 1,000,000 per year over any successive two-year period[49].
Cross Timbers Royalty Trust(CRT) - 2024 Q4 - Annual Report